Thursday, March 24, 2016

The class action is dead … long live the class action! #SCOTUS upholds “representative samples” for class certification

It’s been nearly five years since the Supreme Court decided, in Wal-Mart Stores, Inc. v. Dukes, that the claims of large groups of employees that involve differing calculations of damages must be litigatated as individual claims, and not as a class action.

At the time, and since, may pundits declared the wage-and-hour class action lawsuit dead (or at least with one foot squarely in the grave).

Earlier this week, however, the Supreme Court applied the paddled and shocked the class action back to life.
In Tyson Foods v. Bouaphakeo [pdf], SCOTUS considered whether differences among individual class members may be ignored and a class action or FLSA collective action certified where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample. (You can read more on the background of this case here). Somewhat surprisingly, the Court answered this question with a “yes”.

Because Tyson failed to keep records of the time the putative class members spent donning and doffing, the employees relied for class certification on a study performed by an industrial relations expert, Dr. Kenneth Mericle. Mericle averaged the time spent donning and doffing via videotaped observations, and added that average to the timesheet of each employee to determine which class members worked more than 40 hours a week, in addition to value of classwide recovery.

The Court signed off on the plaintiffs’ reliance on Dr. Mericle to establish class-wide recovery:

Whether and when statistical evidence such as Mericle’s sample can be used to establish classwide liability depends on the purpose for which the evidence is being introduced and on the elements of the underlying cause of action. Because a representative sample may be the only feasible way to establish liability, it cannot be deemed improper merely because the claim is brought on behalf of a class. Respondents can show that Mericle’s sample is a permissible means of establishing hours worked in a class action by showing that each class member could have relied on that sample to establish liability had each brought an individual action.

Note, however, that the Court’s “yes” was a qualified yes, depending on the scientific reliability of the statistical sample:

This is not to say that all inferences drawn from representative evidence in an FLSA case are “just and reasonable.” Representative evidence that is statistically inadequate or based on implausible assumptions could not lead to a fair or accurate estimate of the uncompensated hours an employee has worked. Petitioner, however, did not raise a challenge to respondents’ experts’ methodology under Daubert; and, as a result, there is no basis in the record to conclude it was legal error to admit that evidence.

No doubt, this decision came as a surprise, as this Court has proven to be particularly hostile to class actions over the past five years. This case is significant to class-action litigation, just not as significant as some may lead you to believe. Just as Dukes didn’t kill all class actions, this case doesn’t resuscitate them all. First, this case only applies to those instances when employers lack records to establish when an employee was, or wasn’t working. Then, it simply tees up a fight over the expert’s statistics and methodology. Tyson lost this case because it failed to challenge Dr. Mericle. In the future, these cases will be won or lost on the soundness of the expert’s methodology.

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